The uncertain economy and restricted investments in the industry and utility sectors had stalled growth of the Indian medium voltage switchgear market over the last couple of years. However, as the economy expands and market sentiments improve, the growth rate for MV switchgears will rise over the next five to six years, a report from Frost & Sullivan said.
This new analysis from Frost & Sullivan, “Indian Medium Voltage (MV) Switchgear Market,” finds that the market earned revenues of $448.5 million in 2014 and estimates this to reach $695.0 million in 2020. The study covers indoor switchgear, outdoor switchgear, ring main units (RMUs), and compact or unitized substation. The RMU segment is expected to witness the highest revenue compound annual growth rate over the forecast period.
“Government initiatives towards power capacity augmentation and the expansion and development of the transmission and distribution network will fuel the demand for MV switchgears in India,” according to an analyst quoted in the release. “Revenue opportunities are expected from retrofitting and replacement programs as well as the adoption of superior technologies.”
Moreover, the expansion of key industry sectors will generate business for MV switchgear manufacturers. Despite the Government’s fiscal deficit and long approval process for projects, infrastructure and construction activities will gain pace, boosting MV manufacturers’ prospects.
Though the primary demand for MV switchgears traditionally comes from energy-intensive industries such as oil and gas, petrochemical, steel and cement; tightening liquidity and the lack of policy reforms are holding back these industries from investment. With the ongoing introduction of reforms and flagship initiatives like “Make in India”, the economy is expected to improve and revive the investment cycle, which will result these downtrends to reduce over the forecast period.
The Indian MV switchgear market is currently dominated by the top four players, accounting for 65 per cent of the total market. Wide product portfolio, competitive pricing, and strong network of system integrators and panel builders are essential to succeed in the market. With tier 2 players expanding their geographic reach and investing in R&D to introduce new products, the competition intensity is expected to increase in next 3-4 years, the study noted.